Grain Market Rally Shows Signs of Long-Term Bull Trend
The grain market has experienced an explosive rally in recent weeks, reaching new contract and three-year highs across most of the complex. The perfect fundamental storm converging in the grain markets includes the escalation of the Black Sea war and a severe cut in grain exports, as well as tightening U.S. and global balance sheets due to weather issues and strong underlying demand.
Jerry Gulke, president of the Gulke Group, notes that farmers are fielding questions about how long this rally could last and how high prices could run. He cautions producers that with prices for wheat and corn at three-year highs, they should be leery of selling prematurely because the market could continue to move higher on end user buying.
Gulke believes that a longer-term bull market is brewing in grains, citing the tightening balance sheets as evidence. For corn ending stocks in the 2025-26 marketing year, he notes that plugging in a 173 bu. per acre corn yield and stable demand puts ending stocks down to under 1.0 billion bu.
Gulke also emphasizes that national corn yield is likely closer to 178.5 bu. per acre, which would put ending stocks around 1.4 billion bu. This would create a price rationing situation, leading to higher prices and demand-driven growth in the grain market.